Most entrepreneurs don't start a company with an overabundance of "extra" money. In order to get your business off and running on the right foot, it's helpful to be as thrifty as possible (without cutting corners) wherever you can. If you can make the money you have last as long as possible, your business has a better chance of surviving beyond the SBA statistics.
The following cash-stretching tips will assist you in making smart money decisions:
Live Frugally. What does Frugal mean? Living frugally means making money decisions that cost little or are inexpensive. For me personally, this meant starting my business out of my home to save on rent expenses for a commercial building. Other tips include taking full advantage of rebates, signing up for discount cards at office supply stores like Staples, Office Max and Best Buy. Being a smart shopper can save you hundreds of dollars. Keep an eye out for coupons and store them someplace you are likely to use them. I plan shopping trips in advance and make a list of items to purchase to cut down on impulse buys, making sure to include the coupons I plan to use at those stores with my list.
Finance Creatively. It can be tough to convince a traditional bank to loan you money for your startup. If you feel comfortable asking family and friends for money to help start your business, this is a good place to start. Combined with your own accumulation of savings/credit cards/gifts, you can also look for free money like grant money or prizes from business plan competitions. The Small Business Administration is an amazing resource for information on free money in your locale as is Grants.gov.
Start Small. Rather than start with a huge product line in a large number of fragrances, start small. Fewer products means less initial investment. Find a niche market via market research.
Exhaust Inexpensive Marketing. Market through the media, by word of mouth, via Twitter, Facebook, tradeshows, local Chamber of Commerce, etc., before investing in paid marketing.
Rethink Employees. Consider contract or temporary help. Stay at home moms, college students and retirees have all worked well when we need seasonal help. Branch out. Consider hiring an intern who is interested in learning about your particular industry. Think about hiring virtual employees such as a virtual assistant to field phone calls and emails.
Negotiate! Realize that everything is up for negotiation, especially in a down economy when vendors are fighting for your money. Shop merchant account fees, banks, web designers, graphic designers, rent and labor. The worst that can happen is that you'll hear "No". If you can afford to pay cash, you have even more room to negotiate.
Utilize Inexpensive and Free Technical Tools. Voice Over Internet Protocals (VOIP) can shave dollars from your phone bill not to mention eliminate installation fees charged by local phone companies. Blogs can be started to help orient consumers about your business and as a free form of advertisement for little to no cost. Twitter and Facebook are free services to help advertise your business and create awareness of your product.
Use Credit Cards Responsibly. Look for cards that offer benefits for your business. We initially signed up for a credit card that gave us 3% back on all of our UPS purchases and saved thousands the first year we used it! Some other cards, like the American Express OPEN card offer cash back at the end of each month.
"Sell" A Piece Of The Action. If you can't afford the help you need, consider offering some ownership in your company as payment. Weigh all of your options prior to committing to piece up your company. Offering ownership is a legal agreement to give away a part of your company in return for money, expertise or services and is often permanent.
Allison B. Kontur
www.BathBodySupply.com
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